Why VOXX International Corp. Shares Got Walloped

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of car audio technologist VOXX International (NASDAQ: VOXX  ) plummeted more than 23% today after its quarterly results and outlook missed Wall Street expectations.

So what: VOXX shares have been crushed over the past six months on signs of deteriorating fundamentals, and today's fiscal fourth-quarter results -- operating loss of $59.6 million on a revenue drop of 10% -- coupled with downbeat guidance only reinforce that trend. In fact, gross margin declined 150 basis points from the year-ago period to 28.3%, suggesting that VOXX's competitive position is weakening as well.

Now what: Management now sees full-year 2015 revenue of $825 million to $830 million, well below the average analyst estimate of $870.6 million. "New products coming to market, our growing OEM platform, sales from new and exciting biometrics, imagery and action cameras, and our expanding retail distribution are the drivers for our optimism," said President and CEO Pat Lavelle in a press release. "I believe we are well positioned to drive meaningful growth over the next few years and deliver long-term sustainable value for our shareholders." When you couple VOXX's worrisome top-line trend with its questionable competitive moat and still-hefty debt load, however, I wouldn't be so quick to bet on it. 

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